Tariffs to Be Placed on Canadian, Mexican Steel if NAFTA Issues Aren’t Resolved by May 103/27/2018
U.S. President Donald Trump has put new pressure on NAFTA negotiations with an order saying he’ll impose steel and aluminum tariffs on Canada and Mexico on May 1 if he’s not satisfied with talks.
Trump’s presidential proclamation Thursday sets tariffs for some countries as of Friday while excluding others such as Canada and Mexico. The document specifies for the first time when those exclusions will run out, adding to pressure for a deal to be reached on the North American Free Trade Agreement around the same time.
A White House statement said Trump will decide by May 1 “whether to continue to exempt these countries from tariffs, based on the status of discussions.” Mexico has said it needs a deal by the end of April, or that talks might as well stretch past the country’s summer election, and then U.S. midterm elections this fall.
Canada and Mexico continue to push for permanent exemptions from the tariffs, which have been set at 25% for steel and 10% for aluminum. Canada is the leading source of U.S. imports of steel and aluminum. Steel is closely tied to the auto sector, one of the core disputes in NAFTA in which there’s been progress recently.
“The United States is continuing discussions with Canada and Mexico,” along with the European Union, South Korea and others, “on satisfactory alternative means to address the threatened impairment to the national security by imports of steel articles from those countries,” Trump’s proclamation said.
Trump pledged to apply them unless “I determine by further proclamation that the United States has reached a satisfactory alternative means” to address “threatened impairment” of the steel sector.
The move comes after recent signs for optimism on NAFTA talks. Canadian Prime Minister Justin Trudeau said this week “there seems to be a certain momentum around the table” and that “a win-win-win deal is not only possible but likely.” U.S. Trade Representative Robert Lighthizer said Wednesday the countries are “finally starting to converge” on the critical issue of auto sector rules, but warned Thursday time was running out.
“I believe that substantial progress is being made but we are quickly running out of time if we are going to have this congress vote on a final passage,” Lighthizer said during a Senate hearing on Thursday in Washington.